The gold price is over $1,385 an ounce this morning, up more than 2.9% as over 8:30 AM Thursday. The precious metal is up 8.75% over the past month and is at price not seen since Sept. 2013.
It would not take many institutional investors — looking for any modicum of return — to push gold higher since it is in such limited supply. Of course these buyers are generally dealing with paper GLD ETF and not the physical metal, which means it is a short-term investment.
However the Shanghai gold exchange is seeing plenty of physical buyers from China wishing to protect their wealth.
This action comes out of the US-China tariff talks, which I have written about prior.
To sum up that post briefly, the tariff talks are about China letting the yuan appreciate in value so the price of all goods rise coming out of the country. This way the US would be more competitive without putting tariffs on thousands of individual products.
In turn China wants the price of gold to be unshackled by sovereign short sellers hoping to prop up the dollar against the gold price. This is what has gold up nearly 9% over the last month.
If I’m right, look for more 2%+ moves in the gold price in the coming weeks.